Allen Onyema, Chairman and CEO of Air Peace, has raised serious concerns over the impact of Nigeria’s recently enacted tax provisions on the domestic aviation sector, warning that ticket prices could soar and force some airlines to suspend operations.
In an interview, Onyema described the current tax environment as heavily burdensome, highlighting overlapping levies and charges that reduce airline revenues and threaten the sector’s viability. He specifically pointed to mandatory deductions imposed by regulatory bodies, which he says undermine passenger demand and diverge from international aviation standards.
Onyema contrasted the new tax framework with the 2020 law, which provided critical relief by removing VAT and customs duties on imported aircraft, parts, and ticket fares. The reintroduction of these taxes, combined with high borrowing costs, is expected to significantly increase operational expenses and, in turn, passenger fares.
He emphasized that the financial strain could ripple across the economy, affecting passengers, banks, and industry stakeholders, and urged the government to reconsider the reforms or revert to the previous tax provisions.
While warning of the potential consequences, Onyema commended the federal government and President Bola Tinubu for previous responsiveness to industry concerns, expressing hope that continued dialogue could prevent a crisis in the aviation sector.
